Total Reserves €308 Million for FCPA Settlement

Oil major Total SA said in a regulatory filing Monday it had reserved €308 million to settle a long-running investigation by U.S. authorities into potentially corrupt business practices in Iran.

The company said on Monday that U.S. authorities had proposed draft settlement agreements “that could be accepted by Total,” and had put aside the €308 million, or $398 million, as a result.

UPDATE: The estimated $398 million in settlement costs remain unchanged from an estimate by the company in August, according to a Total spokeswoman. But the company booked the settlement funds in euros and the reserve was €8 million less than a previous settlement estimate due to exchange rate variations, the spokeswoman said.

The Securities and Exchange Commission and the Justice Department have been investigating Total’s pursuit of contracts in the early 2000s to develop parts of Iran’s South Pars gas field, among the world’s largest.

The huge sum reserved would be one of the largest-ever settlements under the U.S. Foreign Corrupt Practices Act, which prohibits improper payments to foreign officials to gain a business advantage.

A spokeswoman for the Justice Department didn’t immediately respond to a request for comment. An SEC spokeswoman declined to comment.

The SEC opened its probe in 2003 and the Justice Department followed. Total previously disclosed that the investigation focused on whether a consultant hired by the company paid bribes on its behalf, in violation of the FCPA.

Total said it opened talks with U.S. authorities in 2010 and has been cooperating with the Justice Department and the SEC.

In previous regulatory filings, Total has said that it doesn’t believe that its contracts in Iran violated any law. The company said in March it had turned down settlement terms offered by the agencies because it was “unable to agree to several substantial elements of the proposal.” But in August, Total said it had reserved €316 million after discussions with U.S. authorities “accelerated.”

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